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The market continues to trade in a range as it moves on the COVID-19 news, the next round of stimulus measures and China and US tensions. Again, there is no clear direction and a ton of uncertainty and at this point a congested sideways trading market it what we get.
According to publicly filed financial statements, 40 U.S. oil producers collectively wrote down $48 billion worth of assets in the first quarter of 2020, the largest quarterly adjustment since at least 2015. Low crude oil prices contributed to significant declines in revenue and the value of these companies’ proved reserves. Write-downs reflect negative adjustments in asset values, for example, when a producer acknowledges the value of an oil property has declined to less than the cost of developing it and the company updates its estimate of the property’s value.
Iran’s Islamic Revolutionary Guard is set to start military drills off the Strait of Hormuz to add a bit more uncertainty to the market.
The early downside in yesterday’s trading was helped by Hurricane Hanna have very little impact to refineries and oil production in south Texas.
The US dollar traded to a 2-year low yesterday, which added upside pressure to world commodities especially crude oil which is priced in dollars.
Goldman Sachs forecast year-end 2020 global oil demand at 96.3 million bpd, down about 6 million bpd relative to its pre-COVID-19 expectations. It said it further assumes a persistent loss in corporate travel and sees end of 2021 jet fuel demand still 700,000 bpd below the end of 2019 level.
According to the General Administration of Customs, China, the world’s biggest crude oil importer, imported a record 53.18 million tons in June. China’s crude oil imports from Saudi Arabia in June increased 15% on the year. As refiners ordered record volume of the fuel in March and April when oil prices fell, cementing the kingdom’s position as the top oil supplier to China.
Oil Companies Write Down Billions in Losses
July 28th, 2020
The market continues to trade in a range as it moves on the COVID-19 news, the next round of stimulus measures and China and US tensions. Again, there is no clear direction and a ton of uncertainty and at this point a congested sideways trading market it what we get.
According to publicly filed financial statements, 40 U.S. oil producers collectively wrote down $48 billion worth of assets in the first quarter of 2020, the largest quarterly adjustment since at least 2015. Low crude oil prices contributed to significant declines in revenue and the value of these companies’ proved reserves. Write-downs reflect negative adjustments in asset values, for example, when a producer acknowledges the value of an oil property has declined to less than the cost of developing it and the company updates its estimate of the property’s value.
Iran’s Islamic Revolutionary Guard is set to start military drills off the Strait of Hormuz to add a bit more uncertainty to the market.
The early downside in yesterday’s trading was helped by Hurricane Hanna have very little impact to refineries and oil production in south Texas.
The US dollar traded to a 2-year low yesterday, which added upside pressure to world commodities especially crude oil which is priced in dollars.
Goldman Sachs forecast year-end 2020 global oil demand at 96.3 million bpd, down about 6 million bpd relative to its pre-COVID-19 expectations. It said it further assumes a persistent loss in corporate travel and sees end of 2021 jet fuel demand still 700,000 bpd below the end of 2019 level.
According to the General Administration of Customs, China, the world’s biggest crude oil importer, imported a record 53.18 million tons in June. China’s crude oil imports from Saudi Arabia in June increased 15% on the year. As refiners ordered record volume of the fuel in March and April when oil prices fell, cementing the kingdom’s position as the top oil supplier to China.